At the end of 1958, Auto Union had 3,700
employees in Ingolstadt; twelve months later, the figure had soared to
5,700. The construction of the new plant not only meant that the
workforce had grown dramatically. It was also the principal factor
behind Auto Union's decision to transfer its production to Ingolstadt in
1961, followed by its administrative headquarters in 1962. The desired
rationalization and cost-cutting effects materialized, but from 1962
Auto Union's production and sales figures both took a downturn, at a
time when the parent company was experiencing a boom in both production
and sales.

In 1964 in particular, Auto Union was confronted with acute financial
difficulties. Daimler-Benz AG, increasingly going at arm's length to a
subsidiary that was proving too difficult for comfort, for all its
pedigree, decided that the best solution was what turned out to be a
spectacular commercial transaction: the sale of Auto Union to
Volkswagen. Issue 45 of the news magazine "Der Spiegel" wrote:
"Daimler-Benz's prominent shareholder Friedrich Flick spent more than a
year devising, rethinking and fine-honing the latest big scheme in his
eventful career, "going on to comment that Flick had not only
masterminded "the biggest business event of 1964," but had also been
instrumental in laying down its finer details.

Ownership of Auto Union GmbH was transferred to VW AG in several stages,
from 1964 on. Its new owner spent a total of DM 297 million on the
transaction, and by 1966 had all the company's shares in its possession.

Good times, bad
times...

The takeover by VW meant that Auto Union
escaped going into receivership by a hair's breadth. The era of the
two-stroke engine, formerly so popular, was coming to an end, and almost
30,000 unsold DKW cars were destined for the scrap heap. It was the VW
Beetle which came to the rescue: between May 1965 and July 1969, almost
348,000 of the VW Beetle were assembled in Ingolstadt. From August 1965,
the situation was also alleviated by the launch of the new "Audi". This
car, the first one with a four-stroke engine to be built in Ingolstadt,
aroused considerable market interest and established the basis of a
successful model range. However, the recovery was only short-lived.
After more than fifteen years of seemingly unstoppable economic
recovery, in 1966/67 Germany suddenly went into a recession which hit
Auto Union badly: production had to be cut back dramatically, and
short-time was the inevitable consequence.

On March 10, 1969 Auto Union GmbH signed a merger agreement with NSU
Motorenwerke AG (Neckarsulm). The establishment of the new company with
the name Audi NSU Auto Union AG was backdated to January 1, 1969. This
company, whose headquarters were in Neckarsulm, adopted a course of
growth and expansion from the outset. Production of Audi and NSU cars
rose steadily until 1973, when initial signs of the oil crisis emerged.
In 1974, the weakening of the international economy had such an adverse
effect on the market that the company had to scale down production to
330,000 vehicles, from almost 400,000 in the previous year. Such a
radical measure inevitably cost a considerable number of jobs: in 1974,
the total workforce fell from 33,800 to 28,600; in 1975, 1,700 jobs were
lost at the Ingolstadt plant alone.

Entering a New
Dimension

The car industry recovered at the end of
1975, a development that was reflected in the sales volume of Audi
models. The last NSU Ro 80 left the assembly line in March 1977. This
signalled the disappearance of the NSU brand, which dated back more than
100 years. Since that year, all cars built in Neckarsulm have borne the
name "Audi".

Audi caused a sensation in 1980 with the
launch of the Audi Quattro, the first volume production car with
permanent four-wheel drive. Audi's rally sport activities served to
underline the revolutionary nature and overwhelming superiority of its
Quattro concept: in 1982, Audi became the first German brand to win the
intensely fought-over Manufacturers World Championship, a feat which it
repeated in 1984.

In 1982 Audi establish a record of
another kind: with its drag coefficient of cD 0.30, the third-generation
Audi 100 achieved the best aerodynamic performance of any
volume-produced saloon in the world. Audi had come up with the right
response to the challenges of the moment, at a time when there were
increasing calls for environmental protection and economical use of
fuel.

On January 1, 1985 Audi NSU Auto Union AG was renamed simply AUDI AG.
The company's registered headquarters were simultaneously transferred
from Neckarsulm to Ingolstadt. In the mid-1980s, Audi – along with other
German car manufacturers – began to feel the impact of a high-profile
public debate on stiffer speed limits and reduced exhaust emissions.
Whereas domestic sales fell by 7.5 percent in 1985, exports rose by 9.4
percent.

In 1985, AUDI AG's capital investments totalled almost DM 1 billion, the
highest figure in the history of the company. Product-related measures
and new production technology were the investment priority. In autumn
1986, the new Audi 80 with fully galvanized body was launched. It came
complete with a ten-year warranty against rust penetration, setting new
standards in this class. 1988 saw the appearance of the V8, Audi's first
deluxe-class car, with a 3.6 litre V8 engine and four-valve technology.

Audi's slogan "Vorsprung durch Technik" –meaning "Advancement through
Technology", even though the German version may actually be more
familiar in the English-speaking world – is also substantiated by the
TDI engine concept. Its extremely low fuel consumption was documented
impressively in several economy test runs: in 1992, a standard Audi 80
TDI drove all round the world, covering a distance of 40,273 km and
clocking up an average consumption figure of 3.78 litres of fuel per 100
km (74.7 mpg) and an average speed of 85.8 km/h.

In the early 1990s, the market worldwide was generally weak, but the
fall of the Berlin Wall and German monetary union generated an immense
surge in demand on the domestic market. This sales boost on its home
market helped Audi achieve record breaking sales revenues of DM 14.8
billion in 1991. However, by 1993 it was obvious that the special boom
in Germany had only been able to allay the general downward trend for a
couple of years.

Audi heralded in a new era in presenting the ASF (Audi Space Frame)
aluminium study vehicle in autumn 1993 at the Tokyo Motor Show. The
aluminium Audi celebrated its world début in March 1994, as the
successor to the Audi V8. The new model designation A8 signalled a
radical shift in Audi's model-naming policy. The Audi A6 followed in the
summer, with the new A4 being launched in November 1994. This latter
model rapidly brought further success to the company: in 1995, 120,000
of the Audi A4 were sold in Germany alone.

In autumn 1995, Audi produced its next trump in unveiling the sports car
studies TT Coupé and TT Roadster: these concepts successfully blended
distinctive automotive design based on nostalgic throwbacks with modern
stylistic features and mature technology. One year on, Audi launched the
A3, an attractive two-door compact model intended to draw new customer
groups to the brand. In 1997, Audi presented the new Audi A6 and also
the Al2 study vehicle, the latter an all-aluminium model based on
second-generation ASF technology. The Audi TT Coupé and Audi TT Roadster
production models were launched in 1998 and 1999.

Since 1994, the company's key business figures have benefited from an
uninterrupted upward trend. Audi has become an international developer
and manufacturer of high-quality cars. The company maintains production
sites in Germany, Hungary, Brazil, China and South Africa. Audi sold
over 650,000 vehicles in 2000. Sales totalled around DM 39 billion
(including the Italian sales subsidiary Autogerma). The Audi Group has
around 50,000 employees.